In 1998, after a bid to expand their casinos was voted down in referendums across the province, the Ontario Progressive Conservative Government approached the horse racing industry to install slot machines into participating racetracks across the Province.
After two years of negotiations the Slots at Racetracks Program (SARP) was created which included a revenue sharing agreement to offset the loss of wagering dollars to the competing slot machines.
The agreement was not entered into lightly by the horse racing industry. The industry had very legitimate concerns that slot machines at racetracks would cannibalize wagering on horse racing. The agreement reached for revenue sharing with the industry (and host municipalities) was intended to offset losses on wagering on horse racing, while providing an instant customer-base on which the OLG could build its business.
The Slots at Racetracks Program revenue share was 75% to the newly formed Ontario Lottery and Gaming branch of the Ontario Government, 5% to the municipality where the racetrack was located, and 20% to the horse racing industry (10% to the host track and 10% to the horsepeople through purses).
For more than 10 years, the Slots at Racetracks Program has been a highly successful partnership. In the past ten years alone (since 2001), the Slots at Racetracks Program has delivered in excess of $9 billion to the Province of Ontario – net of all commissions earned and OLG expenses. With seventeen racetracks across the province participating in the Slots at Racetracks Program, the economic benefits of the Program have been realized widely across the Province.
The Slots at Racetracks Program is the OLG’s most successful program to date, generating close to $1 billion in net annual revenue for the OLG which helps support healthcare and education in the Province.
According to the OLG’s 2010 Reports the SARP has been not only a source of entertainment in the community, it has also created jobs and contributed to the area economy. The presence of the OLG Slots at Racetracks contributes to the prosperity of area businesses, public infrastructure and residents alike. The economic activity generated in the regions by the facility contributes to the well-being of the communities where we live, work and play.
Since 1998, the Slots at Racetracks Program has:
Supported Local Businesses
~ more than $440 million in purchases were made from local and regional vendors.
Payments to the Municipality
~ more than $641 million from slot revenues were paid out to local municipalities where the racetracks are situated
~ More than $2 billion in wages and benefits paid to OLG employees, much of which is invested back into their communities.
The Ontario Lottery and Gaming has ended the SARP effective March 31, 2013.
The commissions that were earned by the horse racing industry were directly invested into live racing in Ontario. This industry investment supports more than 60,000 jobs, mostly in rural Ontario, and more than $2.3 billion in annual expenditures for the production, care, training and racing of horses in Ontario. Commissions earned from the Slots at Racetracks Program currently generate 60% of the purse value that supports this significant economic contribution in Ontario.
The proposed modernization initiative for the OLG that eliminates these commissions to the industry in 2013 would effectively cut the Ontario racing and breeding industry by more than 60% in a single year. This will affect everyone in the sector – instantly devaluing the investment in the breeding sector in breeding stock and young horses on the ground, and eliminating thousands of jobs in rural Ontario.